An old student of mine, one of my favorites, came to visit to look for a job. About 15 years ago he left a promising academic position in Boston to go back to Athens, where he's from. "I wanted to recreate the childhood I had for my own children," he told me. "Open doors, warm nights sleeping on the balcony, the warmth of friends and family, a civilized pace of life."
Now he is desperate to get out. A calm man by nature, the despair in his voice was unmistakable. "My own economic circumstances are fine," he noted. As a senior member of a wealthy private practice hospital (yes, in Greece), he continues work and be paid. "But I can't go out at night. I fear for my children's safety. Golden Dawn is beating up people in the streets like the SS used to do. Home invasions and kidnappings have become routine. The Greece I knew is gone."
In my limited economic understanding ("amen to that" I can hear you saying), the problem for the Greeks is that there is no easy way for them to repent the sin of borrowing lots of money they had no capacity or intention to pay back. If they still had the drachma, they would devalue it to make their escape. They'd live with the resulting inflation, as the Italians have since the end of WWII, the imbeciles who lent them all that money would be wiped out, and everything would be hunky dory, more or less. Isn't that what we will do if we can't otherwise defuse our debt bomb? In fact, I wonder if that's the outcome some folks on the left would prefer.
But there is no such escape for the Greeks. They can't grow their economy. They are sinking in an endless cycle of borrowing and contraction. They can't earn enough to pay what they owe, they borrow more, they owe more and on and on. Meanwhile their country is disappearing.